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Is xAI the next CoreWeave? SpaceX’s announcement on Wednesday that its xAI unit had struck a deal to supply computing capacity to Anthropic comes a couple of weeks after xAI struck a similar deal with AI coding startup Cursor. Last we checked, AI firms with leading models need all the computing capacity they can get, which means they’re constantly looking for capacity from others. Renting out their own capacity is unheard of for most of them.
That’s precisely why Anthropic is doing this deal. So what’s xAI’s excuse? The simplest explanation, as they say, is usually the right one: xAI doesn’t need all the capacity it has built because its Grok model isn’t getting much traction. Going into business as a cloud operator is at least a way for xAI (which Musk says is now called SpaceXAI) to make some money.
That wouldn’t be a great story for SpaceX to tell investors contemplating buying into its upcoming IPO—if they wanted to invest in a cloud provider, they could buy into CoreWeave, Nebius or Amazon—which presumably is why Musk is spinning the narrative of data centers in space as a key part of SpaceX’s future.
On that front, Anthropic is willing to help out, at least in theory. It says it has “expressed interest in partnering with SpaceX to develop multiple gigawatts of orbital AI compute capacity.” That’s about as meaningful as someone saying they’re interested in getting together for dinner sometime—which often is the last time you hear from them.
One unanswered question is how well equipped xAI is to become a cloud provider. While xAI got its Memphis data centers up and running faster than others in the industry, it is relying on things like mobile gas turbines and Tesla Megapack batteries for power, as we reported on Tuesday, and one of the facilities hasn’t run as consistently as more traditionally built data centers. Just imagine Elon Musk’s reaction when Anthropic or Cursor starts complaining about glitches in his data centers.
Then again, that might be the least of Anthropic’s problems. In this post on X on Wednesday, Musk warned he would kick Anthropic or other cloud clients out of xAI’s data centers “if their AI engages in actions that harm humanity”—whatever that means.
ESPN’s Streaming Switch
One of the most anticipated events in TV in recent years was the day when Disney would make ESPN fully available on streaming. For observers, it was a symbolic moment, epitomizing the decline of the cable TV industry that made ESPN a cash machine. For Disney, it was a chance to sign up new streaming subscribers, capturing sports fans who had cut the cable cord. In late 2024, Disney’s former CEO, Bob Iger, said the new version of ESPN would be “the best product the consumer has ever seen in sports.”
Well, the streaming version of ESPN launched last August, and it wasn’t cheap—the full version was $30 a month, several dollars more than Netflix’s most expensive tier, for instance. That ensured it would test sports fans’ appetite for ESPN. And what’s striking is how quiet Disney has been about the reception for the new offering.
On an earnings call last November, Iger said, “We’ve done extremely well” with signing up new users to the new ESPN offering. Since then, we’ve gotten no fresh details. Indeed, new Disney CEO Josh D’Amaro said almost nothing about ESPN’s streaming app at the company’s March-quarter earnings call on Wednesday, other than discussing new features still to come.
Disney’s disclosures suggest the new ESPN might have made a small impact on revenues. In the 2025 fiscal year, which ran through the end of September, Disney’s sports segment—which includes ESPN streaming—suffered a 1% decline in subscription revenues. That’s turned into a 2% increase in the first half of the current fiscal year, Disney said Wednesday. The turnaround was more marked in the March quarter, to be fair. But the company attributed the improvement this fiscal year mostly to the higher prices and the acquisition of the NFL network in January!
After all the buildup, the payoff for ESPN’s transformation feels a little weak. (Disney’s entertainment streaming revenues in general rose 13% in the quarter, a higher growth rate than for the previous quarter, while operating profits nearly doubled.)
In Other News
• Uber reported steady growth in the first quarter, with gross bookings—the dollar value of all transactions on the service—rising 25%, although only 21% on a constant currency basis. Uber’s free cash flow was essentially flat at $2.286 billion.
• China’s national AI fund is in talks to invest in DeepSeek in a funding round that is now expected to value the company at more than 300 billion yuan ($44 billion), according to two people with knowledge of the discussions.
• DoorDash reported 33% growth in revenue, to $4 billion, a slowdown from the fourth quarter but still several percentage points higher than the rate the food-delivery firm had reported for most of last year. The strong growth reflected the acquisition in October of the European delivery firm Deliveroo.
• Nvidia is partnering with Corning, which manufactures glass used in smartphones as well as optical fiber and hardware components for data centers, to build three new factories in North Carolina and Texas focused on optical technologies. As part of the arrangement, Corning has issued warrants to Nvidia to purchase up to $3.2 billion of the glassmaker’s stock.
• Warner Bros. Discovery’s revenues fell 3% in the first quarter, the entertainment firm reported Wednesday, highlighting the challenges facing the Ellison family’s Paramount Skydance, which plans to buy WBD later this year.
• Snap’s revenue growth accelerated to 12% in the first quarter, lifted by strong growth in the social media firm’s small subscriptions business. Advertising, which contributes the bulk of its revenue, grew just 3%, a slower rate than in the previous quarter.
• Elon Musk once offered Sam Altman a seat on Tesla’s board of directors as part of discussions about OpenAI possibly joining Musk’s electric vehicle company, a Musk ally testified on Wednesday. More here.
Today on The Information’s TITV
Check out today’s episode of TITV in which we unpack our reporting on Anthropic’s cloud deals with Google.
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